More credit towards design center?

I think part of a design/build company could be cool. 

The unit should be able to get into the 80's. 80 degrees during the day seems comfortable to me.

For further context, the borrower would be able to comfortably afford the mortgage with the rental income but not without it completely.I understand that potential rental income from the property may be considered for a loan amount, but I’m not sure how potential income affects the liquid amount that lenders want to see when issuing a loan.

Need a Co. very comfortable with assignments.

After you are comfortable becoming a landlord or renovating/hiring contractors, moving on to a BRRRR, fix and flip, value add apt complex, etc... may be your next step.

Who designed the home?

If you underwrote the deal according to your methodology and it netted 5-10%, you'd pull the trigger if the level of risk you're taking to achieve that result is within what you're comfortable with.

That should be the analysis you do in order to get comfortable with the deal.

Tax wise no, the actual return is higher than 3% but if you're comfortable locking up funds for 6 months, 5% doesn't look terrible to me.